New regulations on private placement of corporate bonds in Vietnam

This is the proposal of the Ministry of Finance in the draft Decree amending and supplementing Decree No. 153/2020/ND-CP dated December 31, 2020, regulating individual transactions of corporate bonds in the domestic market and offering corporate bonds to the international market.

Recently, the corporate bond market has shown signs of hot growth, there have been some phenomena of bond capital mobilization that have not yet complied with the provisions of the law. Therefore, in order for the market to continue to develop sustainably, transparently, and effectively, it is necessary to continue to improve the legal framework and strengthen management and supervision. The Ministry of Finance has assessed the market situation over the past time to develop a draft Decree amending and supplementing a number of articles of Decree No. 153/2020/ND-CP on private placement of corporate bonds.

Notable contents of the draft revised Decree

• Amending regulations on the purpose of bond issuance in order to strengthen the responsibilities and obligations of the issuer in using the proceeds from the bond issuance for the right purposes;
• Supplementing regulations on credit rating for some types of issued bonds to increase publicity and transparency, contributing to improving the quality of issued bonds, and helping the market get used to using credit rating results to assess the risks of bonds, in line with international practices, to limit risks for investors;
• Supplementing regulations on the representative of bondholders to strengthen supervision of the purpose of bond capital use of the issuer as well as strengthen supervision of the implementation of other commitments of the issuer; how to identify professional securities investors who are allowed to invest in and trade privately issued corporate bonds;
• Supplementing regulations to accelerate the establishment of a private corporate bond trading market at the Stock Exchange for professional securities investors to increase liquidity and at the same time enhance publicity, transparency, strengthening management and supervision of bonds put into trading on the secondary market;
• Amending a number of regulations on the time limit and content of information disclosure in order to overcome the shortcomings of the past time, and at the same time enhance the transparency of bond issuers and the use of capital issued by corporate bond.

Along with completing the legal framework, the Ministry of Finance continues to direct the State Securities Commission and functional units to strengthen the management, supervision, and deployment of inspection teams to inspect the issuance of securities. bonds of real estate enterprises, credit institutions related to real estate enterprises, enterprises with large issuance volume, high-interest rates, enterprises with loss-making business results, and Issuers do not have collateral.